$10 million payout executed less than one month after Ian's landfall
NEW YORK, Dec. 6, 2022 /PRNewswire/ -- Arbol Inc. (Arbol), a global climate risk solutions platform, today announced the parametric reinsurance solution it developed covering hurricane risks in the state of Florida delivered a $10 million payout to Centauri Insurance, a property and casualty insurer operating in nine U.S. states. The payout was executed on October 21, just three weeks after Hurricane Ian departed the U.S. in one of the first payouts for loss or damage attributed to Hurricane Ian.
Insurance carriers exposed to named storms can obtain a fully collateralized reinsurance solution developed by Arbol that pays out based on predefined, objective parameters. The company developed a parametric reinsurance product covering hurricane risks in Florida and other U.S. states. The parametric loss is calculated at individual policy location level and the payout is based on a reinsurance layer protecting the entire portfolio.
"The parametric reinsurance product enables claims to be settled rapidly, months or sometimes even years faster than the rest of the industry," said Sid Jha, Arbol Founder and CEO. "Because these policies pay out on objective data triggers, we can bring much needed efficiency and transparency to the insurance and reinsurance sectors while providing essential financial relief in the wake of a climate disaster like Hurricane Ian. Parametric solutions allow for claims to be settled rapidly and transparently, which is ideal for helping businesses in states like Florida with outsized risk exposure to hurricanes and enables long-term financial resilience."
Location-level payouts are determined based on the distance of each location from a particular hurricane track and the maximum sustained wind speed captured along the hurricane track. The data and calculation mechanism is transparent as it is pre-agreed before the contract commences. The solution pays out using National Hurricane Center data provided by dClimate, Arbol's exclusive data partner and a leading decentralized climate information ecosystem.
"During recent years, back-to-back storm seasons have battle tested insurers in our region and changed the landscape of our insurance industry," said Ricardo Espino, CEO of Centauri Insurance. "As insurers, we have to start thinking outside the box and seek innovative solutions for mitigating risk. Partnering with a cutting-edge company like Arbol, has given Centauri the ability to process claims faster in the aftermath of Hurricane Ian by utilizing real climate data and state-of-the-art technology."
Estimates from the weeks after the storm made landfall indicate insurers could be on the hook for as much as $57 billion in insured damages. However, processing claims and distributing payouts from homeowners, businesses, and other entities across the state could take anywhere from a few months to years, as was the case with claims associated with Hurricane Irma.
Arbol developed this parametric reinsurance solution for the state of Florida earlier this year. The Arbol platform transacted $100 million gross written premium (GWP) in the first half of this year, outpacing all GWP written in 2021. The majority of the platform's growth has come from parametric programs in the agriculture and energy sectors, with ongoing expansion into the leisure/travel and climate risk sectors. Arbol recently announced a partnership with SingLife with Aviva to offer the first parametric rainfall cover for travelers.
Arbol is a global climate risk coverage platform and FinTech company offering full-service solutions for any business looking to analyze, manage and transfer climate risk. Arbol's products offer parametric coverage which pays out based on objective data triggers rather than subjective assessment of loss.
Arbol's key differentiator versus traditional InsureTech or climate analytics platforms is the complete ecosystem it has built to address climate risk. This ecosystem includes a massive climate data infrastructure, scalable product development, automated, instant pricing using an artificial intelligence underwriter, blockchain-powered operational efficiencies, and non-traditional risk capacity bringing capital from non-insurance sources. By combining all these factors, Arbol brings scale, transparency, and efficiency to parametric coverage in stark contrast to the oligopoly of reinsurers that currently dominate the climate risk insurance space.
Formed in 2006 and based in Sarasota, Florida, Centauri Insurance and its subsidiary companies are part of the Applied Underwriters group headquartered in Omaha, NE with approximately $950 million in group assets. Centauri Specialty Insurance is a property and casualty insurer licensed to serve policyholders in 10 states throughout the Gulf and Southeast regions, plus Hawaii and Massachusetts. Centauri is a specialty insurer covering residential and small commercial properties in storm-exposed areas. Centauri's focus, innovation and expertise add value to markets for insureds and agents alike, bringing the peace of mind that comes from delivering financial protection along with truly personalized service.
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